AMC bonds continue rebound; Carvana, Qurate Retail, Embarq paper moves up; Adani down

By Cristal Cody

Tupelo, Miss., Feb. 2 – AMC Entertainment Holdings, Inc.’s paper continued to trade heavily in the distressed debt market on Thursday.

The 7½% senior secured first-lien notes due 2029 (Caa1/B-) picked up 3 1/8 points on $22.5 million of volume.

The issue climbed over 2¼ points on $21.75 million of supply on Wednesday and added 1½ points on Tuesday on nearly $12 million of volume.

Carvana Co.’s notes rallied about 4½ points to 7 points.

Carvana’s 5 5/8% notes due 2025 (Caa2/CCC) were up more than 6 points on $14 million of volume in the company’s most active issue seen Thursday.

Qurate Retail Inc.’s 8½% senior debentures due 2029 (B3/CCC) traded 3¼ points better during the session.

Credit default swap spreads for the issuer came in more than 350 basis points this week.

Also Thursday, Embarq Corp.’s 7.995% notes due 2036 (Caa2/CCC/CCC) were trading 7/8 point better in strong supply that moved past $12 million.

The company’s CDS spreads, meanwhile, softened more than 30 bps this week.

The iShares iBoxx High Yield Corporate Bond ETF improved 44 cents, or 0.57%, to $77.20 on Thursday.

Volatility was back after declining the previous day following the Federal Reserve’s interest rate hike. The CBOE Volatility index rose about 5% to $18.73.

Adani Group’s paper saw more declines on Thursday as the India-based renewable energy company continues to weather fraud allegations from a U.S. short seller.

Adani Green Energy Ltd.’s 4 3/8% senior secured notes due 2024 (Ba3) dropped 11 points, adding to Wednesday’s loss of 12¼ points.

In other emerging markets distressed paper, Light Services de Eletricidade’s notes have been heavily traded over the week, a source said.

The company’s $600 million dollar bond, the 4 3/8% senior notes due 2026 (Ba3//CCC+), rallied 3¾ points to 59¾ bid on Thursday following a downgrade from Fitch Ratings.

Trading totaled more than $23 million in the notes.

Fitch dropped Rio de Janeiro-based electric utility Light SA and its subsidiaries to CCC+ from BB-, noting substantial risk in the company making a timely bond payment and a growing chance of restructuring.

AMC notes gain

AMC’s 7½% senior secured first-lien notes due 2029 (Caa1/B-) picked up 3 1/8 points to trade Thursday at 65 bid on $22.5 million of secondary supply, a source said.

The bonds have improved more than 6 points this week.

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CC) also traded 2 points better at 56 bid on $14 million of volume on Thursday.

The second-lien notes were up nearly 4½ points on Wednesday in heavy trading that hit $33 million.

The Leawood, Kan.-based movie theater owner and other properties announced Tuesday that it will exit management of its Saudi Arabia-based cinema operations.

Carvana better

Carvana’s notes due 2025 through 2030 rallied about 4½ points to 7 points on Thursday, a source said.

The 5 5/8% notes due 2025 (Caa2/CCC) were up more than 6 points at 58½ bid on $14 million of volume.

Carvana’s 4 7/8% notes due 2029 (Caa2/CCC) jumped 6¾ points to 49 bid on $1 million of trading.

The company’s 10¼% senior notes due 2030 (Caa2/CCC) added 4½ points by the close to head out at 58 bid on $4.75 million of supply Thursday.

The Phoenix-based online car retailer will release fourth-quarter and fiscal 2022 results on Feb. 23.

Qurate sees improvement

Qurate Retail’s 8½% senior debentures due 2029 (B3/CCC) saw gains during the session with the paper up 3¼ points at 51 bid, while its CDS spreads also tightened over the week, sources said.

Trading was steady on nearly $6 million of volume.

CDS spreads for the issuer, formerly known as Liberty Interactive Corp., came in 352 bps in the past week ended Wednesday to 2,124 bps, according to a Moody’s Investors Service report.

The West Chester, Pa.-based home shopping network owner’s CDS spreads moved out 800 bps in December and January.

Embarq higher

Embarq’s 7.995% notes due 2036 (Caa2/CCC/CCC) improved 7/8 point to 50 1/8 bid in strong trading activity on Thursday, a source said.

Volume hit more than $12 million.

Meanwhile, Embarq’s CDS spreads softened 33 bps over the past week ended Wednesday, according to a Moody’s note.

The Overland Park, Kan.-based telecommunications company was acquired in 2022 by Connect Holding II LLC, doing business as Brightspeed, from Lumen Technologies, Inc.

Adani trades lower

In other distressed paper, Adani Green Energy’s 4 3/8% senior secured notes due 2024 (Ba3) stayed under pressure on Thursday with the bonds down 11 points at 62 bid, a source said.

Trading was light on $2.5 million of volume.

The bonds gave back 12¼ points on Wednesday on $11.5 million of secondary supply.

Adani’s paper has been volatile following fraud allegations made Jan. 24 from U.S.-based short seller Hindenburg Research.

On Wednesday, Adani Enterprises Ltd. pulled an offering of equity shares that closed Tuesday with plans to refund the proceeds.

Distressed returns grow

S&P U.S. High Yield Corporate Distressed Bond index one-day returns kicked the new month off stronger at 0.3%, up from minus 0.04% on Tuesday and 0.12% on Monday.

Month-to-date returns were 0.3% on Wednesday after January returns ended at 7.99%.

Quarterly- and year-to-date total returns rose to 8.32% mid-week from 7.99% on Tuesday and 8.03% on Monday.

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